Angelo, Gordon & Co. is raising $1 billion for a new Energy Credit Opportunities Fund meant to take advantage of the dislocation in the energy sector. The New York-headquartered alternative investment firm's strategy will be to trade non-investment grade corporate credit, originate loans to energy companies and work on restructuring in distressed situations, according to documents from the Contra Costa Employees Retirement Association, which is considering investing in the fund.
The vehicle will focus on energy sector credit opportunities, including loan origination, purchase of secondary market first and second lien debt, stressed and distressed loans and bonds, royalties and production payments, the documents from CCERA's Friday (18 June) board meeting said. No one investment will take more than $100 million or 10 percent of the capital and the geography will be limited to North America. The investment term will be for two years from the initial capital call, with a one-year extension option. The fund will charge a 1.5 percent management fee and 20 percent performance fee.
The energy direct lending team, led by Todd Dittmann, was brought on to Angelo Gordon in the fall of 2013 and is based in Houston. The Angelo Gordon Energy Credit Opportunities Fund is the second fund the team is involved with at Angelo Gordon. Their first fund is a dedicated direct lending fund, the Angelo Gordon Energy Partners, which was launched last year.
Many other alternative investment firms have been raising energy debt funds to capitalize on the opportunity created by falling oil prices. They include Blackstone/GSO, Apollo Global Management and Goldman Sachs, among others.
Angelo Gordon handles a variety of private equity, real estate, credit and hedge fund strategies. The firm also recently hired a team to build a corporate direct lending platform , which is called Twin Brook Capital Partners and is based in Chicago. Angelo, Gordon is headquartered in New York and has $27 billion in assets under management.